Korean Economy News
Seoul to reflect green migration costs in electricity bills from next year
2020-12-18

[Graphics by Song Ji-yoon]

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[Graphics by Song Ji-yoon]

South Korean government will implement new electricity billing from January to reflect changes in fuel expenses and additional coal phase-out costs.

The electricity bill for a typical four-person household will go up by as much as 1,800 won ($1.64) per quarter, according to the revision plan announced by the Ministry of Trade, Industry and Energy and state utility firm Korea Electric Power Corp. (KEPCO) on Thursday. The new billing system will take effect in January 2021.

The key change in the revised electricity billing system is linking fuel expenses to electricity bill. A difference between three-month average and annual average fuel expense will be reflected to the bill with an annual ceiling of 5 won per kilowatt.

As the global oil prices remain low, the electricity bill for households is expected to fall until the first half of next year. The fare could go up when oil prices rise.

The trade ministry said it will make adjustments upon exceptional events, such as sharp rise in oil prices, happen.

Another major change in the new billing system is reflection of coal phase-out expense, which is estimated at 0.3 won per kilowatt. The costs for renewable energy and greenhouse emissions trading that have been included in the overall electricity charge will be separated out as a new entry.

The trade ministry said the additional cost incurred for a household due to the coal phase-out is estimated at 105 won. Some economists, however, warn that the bill could increase rapidly in line with active adoption of green policies.

Meanwhile, KEPCO will gradually reduce the electricity bill discount programs, which include 200 billion won annual exemption for key household electricity uses.

Interlocking the fuel expense to electricity bill would only provide an excuse for state utility not to provide cheap power source like nuclear power generation and pass on the extra cost to people, criticized Joo Han-gyu, professor at Seoul National University.

By Oh Chan-jong and Cho Jeehyun


[? Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]?



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